Local Government Pension Scheme Updates28/09/2020
We have set this page up to keep members up to date with the latest consultation on the LGPS concerning plans to cap exit payments to £95,000.
Attached are documents you can read to keep abreast of what is going on, and a template letter below that you can send to your local MP to draw their attention and support to our campaign.
Dear (insert name of your local MP)
The introduction of the £95,000 cap on exit payments
I am writing to you as a constituent, to express my serious concern at the Restriction of Public Sector Exit Payments Regulations that are currently being rushed through Parliament. I urge you to vote against the Statutory Instrument when it returns to the House of Commons this week.
The original proposals were made in 2015 and last consulted on in 2019. Since then the government has taken no further action until now, when the UK is facing a second wave of COVID-19 and public services are stretched to their limits dealing with it.
This is an unneeded and unwelcome distraction for our employers, and a personal catastrophe for many long-serving members who are about to be made redundant because of the crisis, and stand to lose pensions that they are entitled to under the Local Government Pension Scheme (LGPS) regulations if they are over 55.
The Government said that underpinning the reforms were the principles of fairness, modernity and flexibility.
As they stand, they are unfair to local government workers. The cap would include strain payments made to the pension scheme – money that the individual never receives.
The cap could therefore reduce the exit payments of workers who have decades of public service and earn less than £24,000 a year, almost 25% below the average full-time UK salary.
These workers are generally female and/or from Black communities, causing a range of potential equalities risks that would likely disadvantage those staff and increase costs to employers.
A full and urgent Equalities Impact Assessment of the implementation of the cap is needed before anything else happens.
Members have been paying a considerable part of the cost of the LGPS through their contributions, and as taxpayers, throughout their working lives. They should get the benefits as well as the redundancy protections as set out in the pension regulations.
To rush through the cap before LGPS regulations are changed could even be found to be illegal as it would cause a clash with those Regulations.
The proposals are also extremely cumbersome. The waiver process would require a full council meeting to modify the cap. And the requirement for Treasury approval makes it unlikely that many who will be in financial hardship can be paid in excess of the cap.
For these reasons the Government should listen to LGPS members and remove the threat of reduced pensions for long-serving staff made redundant.
The Government should also defer the implementation date until the consultation on how the LGPS needs to be changed and what options should be introduced to accommodate the severance cap.
It should also be delayed until the COVID-19 crisis is over so the effort of local authorities to deal with the crisis is not hampered by the disruption these regulations would cause.
The Government has failed to listen to these concerns, and so we are urging MPs to vote against this measure.
Many thanks for your time.